Is Autoliv or Gentex the better buy after Q3 results?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Oct 23, 2021
  • Auto parts manufacturers Autoliv and Gentex shares plunged after reporting Q3 results.
  • Both companies reported their most recent quarterly results before markets opened, missing analyst estimates.
  • Autoliv trades at a P/E ratio of 14.78 while Gentex’s equivalent is 18.26.

On Friday, auto parts manufacturers Autoliv Inc. (NYSE:ALV) and Gentex Corp (NASDAQ:GNTX) shares fell after announcing their most recent quarterly results. Both companies reported their FQ3 revenue and earnings before markets opened, missing estimates.

Autoliv

Autoliv posted FQ3 GAAP non-GAAP earnings per share of $0.73, missing the consensus estimate of $0.86. In addition, its GAAP EPS of $0.68, was $0.20 below the average for analyst estimates, while revenue for the quarter fell by 9.3% Y/Y to $1.85 billion, missing the consensus Street expectation by $80 million.

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The stock trades at exciting trailing and forward P/E ratios of 14.78 and 12.03, respectively. 

In addition, analysts forecast its EPS to grow by about 40% next year and by about 48% annually for the next five years.

Therefore, ALV could be a compelling option for both growth and value investors.

Source – TradingView

Technically, ALV shares seem to have pulled back to avoid crossing to overbought conditions, creating room for more upward movements.

Therefore, investors could target more gains at about $96.47, or higher at $100.06, while $88.94 and $85.01 are crucial support zones.

Gentex

Gentex also failed to match earnings expectations, missing the consensus GAAP EPS estimate of $0.35 by $0.03. On the other hand, its FQ3 revenue plunged by 15.8% from the year-ago quarter to $399.59 million, $22.48 million below estimates.

Gentex shares trade at trailing and forward P/E ratios of 18.27 and 15.97, respectively. In addition, analysts forecast earnings to grow by more than 25% and by an average annual rate of 15.80% over the next five years.

Therefore, the stock also seems to offer compelling growth prospects at reasonable valuation multiples. 

Source – TradingView

Technically, Gentex shares appear to have plummeted to drop out of an ascending channel formation. However, the stock is far from reaching overbought conditions and is yet to retest the 100-day moving average.

As a result, investors could target extended declines at $33.34, or lower at $31.99, while $35.57 and $36.82 are crucial resistance levels.

Buy Autoliv, sell Gentex?

In summary, although both stocks trade at exciting valuation multiples whilst offering compelling growth prospects, Autoliv seems poised for a rebound while Gentex’s decline may not be over yet.

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